Mobile advertising is a complex and fragmented ecosystem that needs to have sound and stable end-to-end measurement metrics to truly understand the attitudinal, behavioral, social media and transactional response that cover all elements of a mobile campaign.
Consumers worldwide are rapidly shifting their media consumption to mobile devices. The mobile advertising ecosystem -- specifically smartphones and tablets -- presents huge opportunities (and unique ways) for brands and agencies to reach the right consumer at the right time and the right place using the right medium with the right advertising message.
However, despite the growth in the mobile advertising market, as well as the size of the audience, metrics and measurement of smartphone and tablet campaigns remains a significant challenge (and barrier) for agencies and brand marketers -- causing them to be more conservative in their mobile marketing spend and not fully embrace the channel.
While traditional metrics have been applied to the mobile industry, which makes sense to some extent, they don’t fully capture the breadth and depth of mobile -- which is capable of generating an incredible amount of intelligence around behavior and engagement with content, advertising, and real-world locations. Mobile advertising needs to have end-to-end metrics to truly understand the attitudinal, behavioral, social media and transactional response that cover all elements of a mobile campaign. This level of information will enable brands and agencies to measure performance and optimize at all phases of the campaign to ensure the best possible results. However, before we develop metrics that are more unique to the mobile ecosystem, we need to ensure that we have sound and stable measurement standards and reliable, consistent methodologies to understand audience behavior and ad effectiveness.
The mobile ecosystem -- which is complex, fragmented and both growing and evolving rapidly -- presents a very difficult challenge to develop an effective measurement framework. In mobile, we have:
- Mobile web
- Mobile downloadable
- Mobile search
- Mobile video and TV
- Mobile apps (the popularity of apps requires a measurement methodology that includes them as well)
- Mobile text messaging (SMS and MMS) potentially, and so forth.
In addition to these channels, the mobile measurement landscape is further confounded by the fact that there are multiple operating systems, varying technologies, handsets, devices/platforms, and carriers across smartphones and tablets. The various players involved use different (counting) methodologies, which causes massive discrepancies and inconsistent measurement, metrics and reporting standards -- all inhibitors to getting a clear view of a campaign's ROI. Basically, the problem is fragmentation of information.
This is why most in the space argue the need for a common set of reporting metrics and measurement standards for smartphones and tablets to unlock greater spending and value like with all other advertising. Determining bottom-line value is of the essence. In addition, in order for mobile to compete with online and traditional media vehicles, getting standardized measurements of success is crucial. After all, without metrics that are apples-to-apples, how will both buyers and sellers of mobile advertising have enhanced confidence that the performance and effectiveness of campaigns can be consistently and accurately measured?Agencies and brand marketers need to be able to measure the results of their campaigns and do this in a manner that is more consistent, repeatable and scalable, allowing easy comparison of the effectiveness of each campaign. One of the greatest frustrations facing agencies and brand marketers is the lack of consistency between their online advertising campaign initiatives and mobile.
Measurement has become a critical element to quantify the mobile opportunity to drive brand involvement. With the introduction of greater accountability, accuracy and consistency -- via standardized definitions, measurement and (set of) metrics -- to the medium, agencies and brand marketers will no longer see mobile advertising as a "trial and error" exercise, but as an effective medium for reaching and engaging the most accurately targeted audience possible, and absolutely integral to:
- Demonstrating the value of the mobile channel
- Marketers learning how to use mobile most effectively
- Increasing the credibility of mobile advertising
- Establishing mobile as a legitimate advertising medium
- Increased investment in the mobile space
- Helping to determine what and how much to allocate to mobile
- Making mobile a cohesive and integral part of the marketing mix
- Prioritizing mobile against other media
- Measuring the effectiveness of mobile in multichannel advertising initiatives
The growth in consumer usage as well as the increase in ad spending on mobile platforms underscores the urgent need for greater transparency, improved methodologies and standards for mobile audience measurement and advertising effectiveness and industry-accepted currency. This will not be easy -- measurement rarely is -- and it will require the cooperation of all key stakeholders in the industry, something that is not easily done.
I am not advocating that the industry just adopt the (legacy) online measurement models and metrics without taking into account the specific strengths and unique characteristics of mobile advertising. Mobile has many facets, so it will be difficult to apply a "one size fits all" model to measurement and metrics. Mobile is one of those moments in media history when new consumption patterns are rapidly evolving, opening the door to new approaches to measurement and (deeper) metrics.
The value and success of mobile advertising isn't just about establishing standard measurement and metrics; it’s about figuring out how it helps across all media touchpoints. Mobile is not a stand-alone medium. It's a connective piece of a broader and comprehensive multichannel campaign and experience. If you measure it in isolation, you might be under-leveraging the value.
COMMENTARY:
Mobile Ad Spending To Surge 95% in 2013 and More Than Double by 2015
At the end of August 2013, the Interactive Advertising Bureau (IAB) reported that mobile advertising spending in the U.S. totaled $3 billion in the first half of 2013, up from $1.2 billion a year earlier.
eMarketer estimates spending on total worldwide digital advertising will reach $117.60 billion in 2013, up 13.0% compared to 2012 levels
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Worldwide mobile spending will hit nearly $15.82 billion, representing a whopping 79.7% year-over-year increase.
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Much of the spending growth stems from broader digital adoption of online video, music, news and information, entertainment, gaming and social networks on the part of consumers and the proliferation of mobile devices like smartphones and tablets.
According to eMarketer, the key figures on media usage and spending are as follows:
- Internet users: More than 36% of the global population today, compared to 21.7% in 2008.
- Mobile phone users: 60.7% of the population this year, compared to 40.0% in 2008.
- Smartphone users: Just under one-third of mobile users and about 20% of the global population, compared to 3.7% of mobile users and 1.5% of the population in 2008.
- Social network users: About a quarter of the global population, compared to 8.3% in 2008.
- Facebook users: More than 15% of the global population, compared to 3.1% in 2008.
- Total ad spending: $517.10 billion in 2013, up 2.8% from last year, compared to $484.30 billion in 2008.
- Digital ad spending: More than 22% of total ad spending in 2013, compared to 12% in 2008.
- Mobile ad spending: Just 2.6% of total ad spending and 11.9% of digital ad spending, compared to 2.1% in 2008.
The Global Media Intelligence Report is eMarketer’s largest and most comprehensive snapshot of the state of media usage and spending globally. The report contains more than 700 charts collected from over 150 global research sources, which SMG helped identify and gather for local and core global markets, in addition to benchmarks, analysis and context provided by eMarketer.
Mobile Ad Spending Not Keeping Up With Actual Mobile Usage
While the jump in mobile advertising may appear dramatic, it is actually creeping upward too slowly and is currently nowhere near where it should be. There continues to be a 9-point gap in the time people spend on their mobile devices (12 percent) and the mobile advertising budget allocated by companies (3 percent), according to Mary Meeker’s Digital Trends report.
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To close this gap, it’s important to understand that marketers can reach the same audience they are looking to engage through digital advertising on the Internet and social media. Earlier this year, TechCrunch reported that in the U.S., the mobile audience is roughly equal to Internet users on laptops and desktops and comScore reports that by 2014 this will occur globally.
Google, Facebook, and Yahoo! all have acknowledged a significant cost disparity between what they can charge for mobile advertising vs. their more established and more profitable digital advertising. That is exactly why marketers should take advantage of the lower cost-per-thousand (CPM), cost-per-click (CPC), and cost-per-action (CPA) rates in mobile—at least for now.
Mobile Ad Rates
DefinitionCPM stands for "cost per mille," or cost per thousand impressions. Advertisers bid on online ads for mobile devices and pay more for those they consider more valuable and from which they get better responses. While advertisers pay per thousand times a mobile ad is displayed, statistics use eCPM, or effective CPM, calculated by dividing the total amount paid for ads by the total number of impressions and multiplying the result by 1000.
Mobile Advertising
Mobile advertising has been increasing rapidly, both in volume and value. Over the last three months of 2012, average mobile ad rates increased by 50 percent and they retained most of the increase in January 2013. Effective CPM rates ranged from $0.53 for an Android device in October 2012 to $1.12 for an iOS device in December 2012. In January 2013, eCPM rates for Android devices remained high at $0.88 while those for iOS devices decreased from their peak to $1.08. iOS devices achieved consistently higher rates than Android devices by about 30 percent.
Tablets
The tablet market is still developing and growing rapidly. Tablets are used differently than smartphones and they result in more traffic and higher ad values due to their larger screen sizes. The iPad is the leader, achieving a peak eCPM of $1.56 in December 2012 before falling back to $1.38 in January 2013. Andoid tablets showed a similar pattern over the period, with a December 2012 eCPM peak of $1.14 before falling back to $1.05 in January 2013.
Smartphones
Average eCPM rates for smartphones are lower than for tablets, but the iPhones achieve higher rates than the Android devices. The difference is less pronounced than for tablets, with Android phones receiving a peak eCPM of $0.91 in December 2012 before dropping back to $0.88 in January 2013. The iPhones achieve rates of $1.16 and $0.97 over the same periods.
Trends
The increase in eCPM rates for mobile ads has continued into 2013. Average mobile eCPM rates as of June 2013 are $1.31 and the split in rates between tablets and smartphones is continuing, as are the higher rates achieved by iOS devices. Mobile advertising has room to grow since its share of advertising revenue lags its share of media consumption and traffic generation.
Courtesy of an article dated September 3, 2013 appearing in MediaPost Publications Blogs, and article dated September 25, 2013 appearing in eMarketer
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